Japan's economy is thriving despite the four-year shutdown of the country's nuclear power stations following the massive earthquake and tsunami in March 2011, analysts say.
Japan's switch to fossil fuel following the disaster at the Fukushima Daiichi nuclear plant drove up electricity prices by around 30 percent since 2011, raising concerns that energy costs could hit manufacturers' bottom lines. Yet concerns appear to have been overblown as manufacturers were quick to adapt, while the Japanese yen's over 40 percent decline against the dollar since 2013 helped boosted profits.
"Japanese manufacturers have adapted to the 30 percent electricity price increase by cutting back on energy consumption," said Japan Research Institute (JRI) chief researcher Takumi Fujinami. "Higher prices haven't had much of an effect on manufacturers' bottom lines because electricity represents only around 5 percent of raw material costs."
Toyota, for example, which generates around a fifth of sales from the two million cars it makes in Japan every year, is forecast to post a 15 percent on-year jump in operating profit to 2.78 trillion yen ($22.9 billion) this fiscal year – its second straight year of record profits.